Energy Policy:

With the exception of Hawaii, Puerto Rico is the only major state or territory that imports nearly all of its energy resources. How is Puerto Rico attempting to change the energy game? During today's OnPoint, Kenneth McClintock, secretary of state of Puerto Rico, explains how the territory is shifting its energy policy to reduce its dependence on oil.

Monica Trauzzi: Secretary McClintock, with the exception of Hawaii, Puerto Rico is the only major state or territory that imports nearly all of its energy resources, so you guys are highly dependent. What does this mean for your energy profile and the position that you take on energy policy?

Kenneth McClintock: Well, what it means is that, you know, consumers in Puerto Rico are subject to the petrol dictators of the world, as Tom Freeman would call them, because 70 percent of our electricity is generated by oil at the present time. So what we're doing is finding ways of reducing our dependence on foreign oil, reducing our dependence on fossil fuels, and promote renewables. What we're doing right now as an intermediate step is that we're switching from 70 percent oil to 70 percent natural gas. Natural gas, as you know, although it's up fossil fuel, but it's widely available in the U.S. So we can get it from domestic producers rather than foreign producers. The price of natural gas is lower and it's more stable. It does go up and down, but not at the same rate as the changes that OPEC imposes on the world.

Monica Trauzzi: And you're working to get the Via Verde pipeline online and ...

Kenneth McClintock: Well, actually, via Verde is much more than a pipeline. It's a whole change of our system. It includes a very safe pipeline. Some people are trying to compare it to the San Bruno pipeline. This one was not built in the 40s. It's being built in 2011 with multiple sensors, automatic shutoff valves and all that, so it will be a very safe pipeline. But, in addition to the pipeline, we're converting oil-fired generators into natural gas-fired generators and we're doing a lot of other things to reduce the price of electricity to consumers, making it more dependable and making it less risky than it is with oil. And so all of that is what we call via Verde. There's much more than the pipeline.

Monica Trauzzi: In the U.S. we hear a lot about natural gas ...

Kenneth McClintock: In the rest of the U.S.

Monica Trauzzi: In the rest of the U.S we hear a lot about natural gas being a bridge fuel.

Kenneth McClintock: Yeah.

Monica Trauzzi: Do you consider natural gas a bridge fuel for Puerto Rico as well or do you have longer-term plans for it?

Kenneth McClintock: No, no, we see it as a bridge fuel because it will take renewables some time to come on board. We've already issued power purchase agreements for about 600 megawatts of electricity that will be coming online in the next three or four years. We set some very specific goals to bring up the level of renewables in Puerto Rico, but still it takes a while, the permitting process. Technologies have to be refined somewhat. Prices have to start coming down. So, you know, we're not going to buy a digital watch when it was still at $99. We're not also going to wait until digital watches are down to $0.99 as they now are. But we would like to see renewable prices go down somewhat before we get really heavy into renewables. So we're doing a combination of moving gradually into renewables and at the same time bringing in liquid natural gas as a bridge. So tell us a bit about the forms of alternative energy that you're producing inside Puerto Rico.

Kenneth McClintock: Some of them, well, obviously solar. You know, we do have a little bit more sun than you'll find in Germany. We're doing wind power and we're looking very closely at other types of alternative energy, ocean thermal energy conversion. We've identified two sites in northwest Puerto Rico and southeast Puerto Rico that would be particularly attuned to using OTEC technology there. Kinetic water movement technology, you know, we have a lot of water around us, the Atlantic to the north, the Caribbean to the south, contrary to other jurisdictions who are more landlocked. So we're looking into all that as we look into the long-term for renewables.

Monica Trauzzi: What kind of legislation do you have on the books that sort of helps incentivize people, people and companies to be more energy efficient?

Kenneth McClintock: Well, in addition to legislation that was put in place when I was a member of the Senate and Senate president, such as the net metering law which is in place of which I'm the author, we recently put in place legislation that will allow us to not only have incentives for short-term, mid-term, and long-term energy conversion in Puerto Rico, but which basically sets the stage for us to be able to create a huge amount of green jobs in Puerto Rico. Not only as we change our system into a renewable system, but also so that we can manufacture products, green products that can be sold to the rest of the Caribbean, since Puerto Rico is a point where the U.S. becomes a Caribbean nation. We should take the lead in not only helping ourselves to go green, but in getting the whole Caribbean base and go green.

Monica Trauzzi: So you really see yourselves in a position where, in the future down the line, you could be exporting some of the energy that you're producing?

Kenneth McClintock: Yeah and, in fact, we are right now very close to signing an agreement with the U.S. Virgin Islands so that we can transfer some of our electricity to stabilize the electric system in the United States Virgin Islands. We already had a meeting between Governor Fortuno and President Fernandez of the Dominican Republic to see if we can set up also an underwater cable between Puerto Rico and the Dominican Republic so that we can not only provide electricity to the D.R., but also so that some of that electricity can be transferred to Haiti to help Haiti recover economically also. Because we do have a responsibility with the rest of the Caribbean being the place, as I said, where the U.S. becomes a Caribbean nation.

Monica Trauzzi: One of the issues we have here in Washington is that Republicans and Democrats can't seem to come together and agree on how to move forward on energy policy and climate policy. Your governor is a Republican. How do you make things work within your own office?

Kenneth McClintock: Well, because it's very easy for us. The governor and I have been friends for many, many years. He's a Republican, I'm a Democrat, and we've put in policies in place where you will see some characteristics of Republican policies and some characteristics of Democratic policies. So, in that sense, the governor is doing what Republicans have been saying should be done in some areas, but he's actually doing it. But, at the same time, we've been able to integrate some of the elements of a democratic philosophy where it is compatible with what he wants done. So I think we work very well and I think Puerto Rico could be an example, not only for Republicans, but also for Democrats as to how we can all work together and get a problem solved. And, in the long run, make it a place where we can demonstrate that Puerto Rico does it better and that, for example, at this time of the year when you have a choice either being in Miami on December 14 when the wind chill factor was 26 degrees or be in San Juan where it was 74 degrees, the choice is obvious.

Monica Trauzzi: All right, we'll end it there on that note. I hope to take a vacation soon. Thank you for coming on the show.

Kenneth McClintock: You're welcome, thank you.

Monica Trauzzi: All right and thanks for watching. We'll see you back here tomorrow.